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In order to achieve future CO2 targets - in particular under real driving conditions - different powertrain technologies will have to be introduced. Beside the increasing electrification of the powertrain, it will be essential to utilize the full potential of the internal combustion engine. In addition to further optimization of the combustion processes and the reduction of mechanical losses in the thermal- and energetic systems, the introduction of Variable Compression Ratio (VCR) is probably the measure with the highest potential for fuel economy improvement. VCR systems are expected to be introduced to a considerable number of next generation turbocharged Spark Ignited (SI) engines in certain vehicle classes. The basic principle of the AVL VCR system described in this paper is a 2-stage variation of the conrod length and thus the Compression Ratio (CR).